Wednesday, October 04, 2006

Homeruns, Research and the Holes in Between

There have been two Whitepapers published recently that make some grand statements surrounding the effectiveness that Brand has on the search process when it pertains to purchases, and truthfully something isn’t sitting right with me. These studies are specific to e-commerce sites affiliated with the company that has produced the paper, so there is intimate availability of information, and the control over the environment that can be of great benefit when compiling this level of information. The first paper goes on to describe that it has measured the whole search process including first and last click, type and number of words used, whether there were brand terms visible in the clicked search result and so on. It should also be said that the sole focus of that initial Whitepaper was to measure PPC clickthroughs and paths with no attention paid to the Organic. Now, research variables have to be controlled, but some of the conclusions drawn are a bit hefty for the narrow PPC focus, considering the weight that Organic Results have on the search process, both Brand and otherwise.

One of the main conclusions drawn from the first study is that the highest conversion rate occurred when the user’s first and last click were both on a Branded result, citing a conversion rate of 9.30%, which is impressive, I mean who wouldn’t want a 9.30% conversion rate? However, when it is followed up with “Yet, when the first click is on a non-brand term and the last click is on a brand term, the conversion rate is almost as high…”, there is a little bit less value in ensuring that your PPC ads are stuffed with Branded terms, especially when the study does not measure any clicks in between the first and last for branded or non-branded terms. In the study, there were some users that clicked on as many as 9 results, granted these are extreme cases.

But again, the top and side sponsored ads on search results pages have been proven to be clicked farther into the buying funnel, when users are in more of a purchase consideration phase, which would highly improve the conversion rate, especially when the conversion rate is based solely on sponsored ads. The first study is aimed at the 28% of users that use search in the purchase phase of the buying funnel, when over 70% are using it to find out the best solution for their needs, and with our findings in the Google Eye-Tracking study, anywhere from 10-18% of users actually click on the sponsored results, meaning that this sample is roughly 15% of 28% of the users that came to the site through search, so take the conversion rates with a grain of salt. It would be like basing the success of a baseball game strictly on the home runs. Which are always fun to watch, and get a lot of attention, but if one team hits a big home run and the other team is hitting the pitcher all over the park, then my money would be on the better all around team.

The two other “key findings” are; the more times a user clicks on a company’s ad, the more interested they are in purchasing, and the more searches that are performed using unique keywords, the more interested the user is in purchasing. These are two “key” findings that one would expect to find, and if they didn’t find them, then one would expect that there was something wrong with either the ads or the site itself. If a user wasn’t interested in purchasing or learning anything more about a product, then chances are they don’t need or want it that badly. Not only do you have to catch the user in the right phase of the buying funnel, but you also need to appeal to their needs, as simplified by Maslow’s Hierarchy, which contends that “as humans meet 'basic needs', they seek to satisfy successively 'higher needs' that occupy a set hierarchy.” This hierarchy, for those that aren’t familiar with it, consists of the following needs; physiological, safety, love/belonging, esteem and actualization. For a good reference site for this information, visit its Wikipedia page.

This first paper concludes with “implications and recommendations” for marketers. For starters, they cite search as “a process”, which is definitely true, stating that “when the searcher is at the end of the research process, that’s when brand terms are far more likely to be entered”, which makes sense. Considering at this point, the small percentage of users that actually click sponsored ads would know what they are looking for, because search IS a process.

They also state that “the interactions between brand and non-brand terms have a significant impact on the total success of a paid search campaign”, even though the results that were pulled from the first few pages of this study state specifically that there was very little difference when comparing the results between the conversion rate when the first and last click were Brand (9.3%) and first click was non-brand and the last click was Brand (8.7%). What concerns me is that they are using this information to make recommendations to Marketers. There is not enough proof in the pudding for me to take this advice either way. What doesn’t concern me is that the recommendation they’re making is “manage brand and non-brand terms together”, which is common sense for anyone running a PPC campaign.

In fact, in each of the recommendations made, it may have been more helpful to have done some insightful research into their client’s analytics packages instead of running a full scale research project. Analytics can be the key to the success of your site, tracking Paid Campaigns, visitor traffic patterns, conversion paths and specific dashboards for reporting what is important to you can help you and your site much more than inconclusive numbers. Manoj Jasra from Enquiro has written a series of articles to help guide you to the right analytics solutions and how to make it work for you. And once you have a solution you are satisfied with, ensure that you are measuring the right metrics or KPIs (Key Performance Indicators) to ensure the success of your site and analytics tracking. Jody Nimetz has written another series of articles specifically about KPIs for different types of sites.

Carrying through to the second study were the methods of measurement, including the first and last clicks without much attention paid to the “pogo-sticking” that occurs between the time that a user initially clicks on a listing and the transaction that takes place at the end of this process. And the unfortunate thing is that, unless a number of these clients are in a competitive landscape and you can measure the back and forth between sites, it is near impossible to gauge exactly what the user did when they were not searching for and clicking on one of this company’s client’s sites. There are so many variables to take into consideration outside of placement of natural and paid listings and the success of interaction between them, including the impression that the actual site that the user ends up on, and as mentioned above, the stage in the buying funnel they are in or how seriously they are looking. So, this second study is a good example of some of the items covered above (Brand vs. Non-Brand, Paid vs. Natural Listings and First and Last Click), and from a tactical standpoint offers some interesting information, but don’t forget those site specific KPIs and Analytics solutions to really be able to tell how well your campaign and site are performing. We can’t know all the variables surrounding the competitiveness of the sites used in this study, but if you are paying close attention to your site analytics, usability and competitive market, then you can use this information as a baseline and measure more variables important to you to get a better idea of the bigger picture.

Read this research paper with a grain of salt, and don’t expect to get out of it what they’re proclaiming with the title of it; “What You Need to Know When Allocating Your Search Budget”, but do take from it what you can and what can be helpful to you. Research is important in our industry, it will be what pushes us ahead, lets us learn what our customers are doing, how they are using the internet, and how the internet plays out in the role of the entire conversion process, both online and offline. It is important for us to be learning all the time, and so my advice to you is to not be concerned with hitting home runs, they might look great on the highlight reels, but they don’t necessarily win you the game. Let’s just concentrate on getting on base and playing each inning without any errors.

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